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In Blog/ Momtrepreneur

10 tax deductions for home business owners

 

It’s almost the deadline to get your taxes done! I feel like I just did them and now here we are again. It’s a vicious cycle. This is only my 3rd year of reporting taxes for Delectable but my 12th year involved in my husbands company. I learned so much about taxes for small business from my involvement in my husbands company that doing it for my own company was almost familiar. Although, I operate my business from home, not from a commercial building, so I still had some things to learn. I’m into learning things the hard way but I don’t want anyone else to do that so here are some often overlooked tax deductions that might work for your home business too.

1 Office space

If you operate your business at home, you probably have an area/room/table/corner that you primarily use to do work. You can deduct a portion of your home, used for business, on your taxes. This only works if it’s your principle place of business. You can’t claim this if you have a separate office outside of the home. Usually you report the square footage of the area and the % of time the area is used for your business if it’s not a dedicated room. Do you pay a mortgage? You may be able to deduct a portion of your mortgage and property taxes from your business operating expenses.

2 Office supplies

This includes any supply you use to operate your business. From pens and post-its to ink, toner, staples and rubber bands. Keep your receipts for every single thing you buy! Ever. Single. Thing. 

3 Vehicle Use/Cost

Do you use your vehicle for work?  If so, then this could be a great deduction. Keep track of your mileage in a little notebook. Keep it in the car and every time you get in to go somewhere business related, write it down; either mileage or time used. Record everything like running to the store to grab supplies, delivering product to customers, taking shipments to the post office, etc. Keep your gas receipts too!

4 Equipment

If you buy a piece of equipment for your business, do not forget to claim it on your taxes. That could be a huge business expense, depending on what it is, and you don’t want to lose that. 

5 Furniture/Decor

Did you buy furniture for your home office? It’s deductible. Did you buy stuff to decorate your booth at a fair or trade show? It’s deductible. I set-up several booths at craft fairs throughout the year and I like to switch up the decor at each event. Any decor I purchase is used exclusively for my business. If I add something to my booth that I plan to use for myself afterwards, I do not report it. 

6 Advertising

This is a business expense almost every business has. This includes any type of internet marketing, business cards, flyers, bus benches and Facebook ads. 

7 Web Hosting

Your website is probably an essential part of your business if not the most essential part of it! Do not forget to include your web hosting costs and domain costs. 

8 Phone/Internet/Utilities

You can deduct all or a portion of these on your taxes. If you use your phone and internet entirely for business then claim it all. As for your utilities, you may be able to deduct a large portion of the total paid throughout the year based on your home office square footage. 

9 Postage

$.44 here and there may not seem like a lot but it can add up through the year. Even if it’s just a few dollars, every cent counts when it come to running a small business. 

10 Repairs & Maintenance 

This is often overlooked because it may occur with or without a home business. If any repair or maintenance effects your business, add it to your deductions. This could include things like plumbing repairs, light fixtures and repainting. I have an office space in my home dedicated to my business but I also use my kitchen for business as well. Any repairs I make to my kitchen or appliances in my kitchen can be expenses. If you aren’t sure if you can claim something, talk to a tax professional.  

Want a super easy & cost effective way to do your taxes yourself?

My business is fairly simple so I like to prepare my taxes myself. I’ve been using TurboTax for years. It’s the easiest software I’ve tried. It makes the whole process so streamlined from entering my expenses to tracking my refund. I recommend it to everyone because I love it so much. It walks you through the entire process in detail and tells you exactly where to put what. It checks for errors and deductions you may have missed. It’s great for everyone, not just home business owners! The best part is, you don’t have to send any paperwork to the IRS. TurboTax e-files it all for you.  

Here is the version I use: 

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